View full sizeA rendering shows a $21 million building planned at the Uptown development in Cleveland'ÂÂs University Circle neighborhood. Looking north from Mayfield Road and Euclid Avenue, pedestrians will see a six-story building that steps down to three stories as it runs northeast on Euclid. Developer MRN Ltd. expects to close this week on a land deal and financing for the project.Stanley Saitowitz, Natoma Architects, Inc.; MRN Ltd.

CLEVELAND, Ohio -- Count students among the newest denizens of Uptown, a sleek retail-and-residential project lining Euclid Avenue in Cleveland's University Circle.

MRN Ltd., the developer behind Uptown, aims to break ground in January for the neighborhood's $21 million second phase. Rising to 85 feet near Ford Drive, the new building will hold ground-floor businesses, 43 traditional apartments and student housing for the Cleveland Institute of Art.

MRN expects to buy 1.5 acres from nonprofit group University Circle Inc. and to close its financing deal for the project this week.

Dorms are a departure for Uptown, a high-profile development at the core of Cleveland's medical, educational and cultural center. The project's first two apartment buildings, just northeast on Euclid, are 90 percent leased at some of the highest rents in the city. Ari Maron, a partner in family-owned MRN, says he still hopes to build and sell condominiums in the neighborhood as the housing market recovers.

But Maron and the major institutions backing Uptown say student housing fits their vision of a diverse district where people of different ages, incomes and professions produce 24-hour bustle. And the project offers a solution for the art institute, which is consolidating its campus in an old Ford Model T assembly plant northeast of Uptown.

"This is going to sell our school tremendously," Grafton Nunes, the institute's president, said of the new dorms.

The school requires first-year students to live in CIA-approved housing, now in buildings owned by Case Western Reserve University. But the university needs that space, so CIA has been looking for a place to put incoming freshmen. The Uptown dorms will hold 130 students, most of them in two-bedroom units designed for four people. The institute has 550 students, and upperclassmen live off-campus.

The designs are the same, but the scope is bigger. Both the dorms and apartments will stretch to six stories, twice as high as the first phase.

Though they'll share the same home, students and renters won't mix. The new building, designed by Natoma Architects Inc. of San Francisco, will be split vertically, with apartments near Ford and dorms to the northeast. Both sections will have their own entrances, exits and rooftop decks.

Following on the success of Uptown's first phase, Maron said most of the apartments will be one-bedroom units, ranging from 570 to 810 square feet. They will rent at similar prices to apartments in the first phase, where tenants pay $1,000 to $2,000 a month for a bedroom, bathroom, living room and kitchen.

"The market seems to be smaller and more efficient," Maron said, noting that many renters at Uptown are coming from outside of Cleveland.

The pieces of the new building fell into place months ago. But it has taken the Maron family and its partners much longer to close the complex deal.

The Cleveland Foundation, a major investor in and around University Circle, provided a long-term loan. A KeyBank affiliate offered New Markets Tax Credits, federal tax credits meant to lure investment to financially distressed areas. Huntington Bank stepped in as the primary lender, and the art institute committed $1 million toward the dorms.

Nunes said the school will lease its dorms from MRN and will not pass on any increased costs to students, who pay roughly $11,000 a year for room and board. The student housing, set to open by August 2014, will be surrounded by billions of dollars worth of recent, new and planned projects, ranging from apartments to museums to public transportation.

Sitting in a room with leaders from the art institute, University Circle Inc. and CWRU last week, Lillian Kuri of the Cleveland Foundation pointed to everything happening at and around Uptown. "I don't think you can build a world-class district like this without this kind of collaboration," she said.

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